UPDATE 3-European shares end turbulent day lower as Fed nerves kick in

* Stocks shed early gains, travel stocks lead drop
* U.S. Fed set to release policy statement at 1800 GMT
* Tyremaker Continental slides after report of cost cuts
* Just Eat Takeaway bottoms out STOXX 600

(Adds details, updates to close)
By Sruthi Shankar and Ambar Warrick
June 10 (Reuters) - European stocks swung both ways before
settling lower on Wednesday as investors awaited the U.S.
Federal Reserve's first economic projections since the COVID-19
pandemic set off a recession in February.
After gaining as much as 0.9% at the open, the pan-European
STOXX 600 .STOXX ended down 0.4%, falling for a second
straight session. Travel and leisure stocks .SXTP led
declines.
Food ordering firm Just Eat Takeaway TKWY.AS bottomed out
the STOXX 600, down 13.3%, after saying it was in advanced talks
to buy Grubhub Inc GRUB.N in an all-stock deal. While no major policy announcements are expected when the
Fed wraps up its meeting later in the day, investors will
scrutinise its remarks on the health of the U.S. economy, given
that its virus-related loosening of monetary policy has flushed
markets with money and helped global equities recover from their
March lows.
The central bank's projections are expected to point to a
collapse in output this year and near-zero interest rates for
the next few years. Any indication that the bank could rein in
its recent stimulus measures would be likely to spook investors.
"European markets are on the back foot once again, despite
early gains, with traders fearing that the recent recovery in
stocks could see (Fed Chair Jerome) Powell take his foot off the
gas," Joshua Mahony, senior market analyst at IG, wrote in a
client note.
The continent's markets have seen a broad recovery in recent
weeks, with investors moving into cheap, growth-sensitive stocks
such as banks and oil companies on hopes that the worst fallout
from the health crisis is over.
However, the banking index .SX7P fell 1.3% despite an
early boost from a Reuters report that European Central Bank
officials were drawing up a scheme to cope with potentially
hundreds of billions of euros in unpaid loans.
"It is clear that investors are increasingly optimistic that
the worst of the COVID-19 pandemic is over and that economies
will recover swiftly," said Mark Haefele, Chief Investment
Officer, UBS Global Wealth Management.
"We believe a degree of caution is warranted. Investors have
moved quickly to price in good news."
Lufthansa LHAG.DE slid 5.7% after Germany said it planned
to extend its travel warning to countries outside Europe until
Aug. 31. Continental CONG.DE fell 3.6% after a media report cited
the German automotive supplier's CEO as saying it needed to save
hundreds of millions of euros and would probably have to lay off
workers due to a slump in demand caused by the pandemic.